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Asian markets trade lower ahead of ECB meet and UK election

Asian shares wobbled in early Thursday trade as investors braced for any surprises from former FBI director James Comey‘s congressional appearance, the European Central Bank’s policy meeting and the UK general elections.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.27 percent while Japan’s Nikkei rose 0.3 percent thanks to the dollar’s rebound against the yen.

Wall Street shares ticked up on Wednesday, despite sharp decline in energy prices, after written testimony from Comey did not add major revelations about an investigation into Russian meddling with last year’s US presidential election.

The 10-year US Treasuries yield ticked up to 2.185 percent after having fallen to a seven-month low of 2.129 percent on Tuesday.

Many investors are wary ahead of Comey’s Senate appearance later in the day for any hints that President Donald Trump may have been engaged in obstruction of justice – an offence that could lead to impeachment hearings.

“If the hearing does not produce clear-cut evidences of obstruction of justice, uncertainties will remain but for market the issue will likely be put on a back burner,” said Hiroko Iwaki, senior fixed income strategist at Mizuho Securities.

“Unless you assume there will be a complete chaos in US politics or a downturn in the U.S. economy, it is hard to see further falls in US bond yields,” she said.

In the foreign exchange market, the dollar stayed near its seven-month low against a basket of currencies as doubts over Trump’s ability to push through his stimulus plans have eroded the greenback’s gains late last year.

The dollar index stood at 96.695, near Wednesday’s seven-month low of 96.511.

The euro traded at $1.1258, near its seven-month high of $1.1285 touched earlier this month, ahead of the European Central Bank’s policy meeting later in the day.

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